Arthur J. Gallagher (AJG) Beats On Q4 Earnings, Ups Dividend
Zacks Investment Research | Jan 31, 2019 09:18PM ET
Arthur J. Gallagher & Co. (NYSE:AJG) reported fourth-quarter 2018 adjusted net earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 3.9%. However, the bottom line plunged 35.4% on a year-over-year basis.
The company’s performance was driven by solid organic growth, sturdy performance across all segments and strong margin expansion.
Operational Update
Total revenues were $1.7 billion, up 3.6% year over year. This upside was driven by higher total revenues in Brokerage and Risk Management. Also, the top line surpassed the Zacks Consensus Estimate by 3%.
Organic commissions and fees earned increased 6.1% year over year to $1.1 billion in the quarter under review.
Arthur J. Gallagher’s total expense rose 8.3% year over year to $1.6 billion in the reported quarter. Expenses escalated primarily due to higher compensation costs, operating costs, reimbursements, interest expenses, cost of revenues from clean coal activities, interest plus higher depreciation as well as amortization expenses.
Adjusted earnings before interest, tax, depreciation and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 15%. Margin expanded 45 basis points.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter earnings so far, The Travelers Companies, Inc. (NYSE:TRV) and RLI Corp. (NYSE:RLI) beat the respective Zacks Consensus Estimate for earnings while The Progressive Corporation (NYSE:PGR) missed the same.
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